With the efforts underway to end GT&T’s monopoly in Guyana, we briefly examine why it has taken so long to achieve, and what to expect in the future.

Although many of us across the Caribbean may take for granted the competition that exists in our telecoms sectors, there are still some countries, such as Antigua and Barbuda, Sint Maarten and Suriname, that still have exclusive monopoly arrangements in place in one or more segments of their markets. Most Caribbean countries introduced legislation in the late 1990s/early 2000s, to end monopoly arrangements and to introduce competition and regulation. It is thus somewhat ironic that as many of those countries are looking to revise their competitive and regulatory frameworks that are now over 10 years old, there are countries, such as Guyana, that are just beginning the initial journey.

Promulgation of a new Telecoms Act in Guyana has been debated for years – even before ICT Pulse was launched in 2011. However, it was only in the past few weeks – July 2016 to be precise – that the Act was passed, but is yet to take effect. In addition to the need to pass a comprehensive suite of regulations, the Government of Guyana is just about to embark on negotiations with the incumbent and operator, the Guyana Telephone & Telegraph Co Ltd (GT&T),  to end their current monopoly in fixed telephony and international voice and data transmission, which should expire in 2025 (Source: Telegeography).

Why has the monopoly lasted so long?

Essentially, the exclusive monopoly in international voice and data services has lasted as long as it has because either – and for a broad range of reasons – GT&T or the Government of Guyana wished to maintain the status quo. From earlier reports, whilst the Government might have been eager to end the monopoly earlier, GT&T was violently opposed to that move; however, the Government itself was also plagued with considerable political turmoil and upheavals, which ultimately delayed liberalisation efforts.

Further, and as in many licences, penalties were likely to be incurred by the Government for terminating the licence earlier than the agreed date, which GT&T would most likely be keen to enforce. As a punitive measure, those penalties tend to be costly, and would have affected the extent to which there was consensus within the Government to proceed to terminate GT&T’s exclusive licence earlier than stated.

It is also important to note that the Government has a 20% stake in GT&T. Hence the dividends and other benefits it would receive, as a shareholder, could be adversely affected if the exclusive monopoly status the firm enjoys is terminated, which would also could have contributed to the Government dragging its feet to push through the changes needed.

What are the next steps?

As at the time of publishing, the GT&T and the Government of Guyana have begun negotiations to end its exclusive monopoly. However, it must be emphasised that these talks are likely to be protracted, as both parties seek to protect their interest. Although the Government may be eager for the monopoly to end as soon as possible, GT&T is likely to want to ensure that they have enough time to prepare themselves for competition in the markets that to date have allowed it to thrive.

Further, and at the same time, the Government must also ensure that the legal and regulatory frameworks are fully in place, and the requisite processes and procedures established in order to manage the prospective new entrants, along with the competition envisaged. Further, once new entrants have been selected, it could take them some time – up to a year – to roll out their infrastructure and launch their services. Ultimately, GT&T should have more than enough time, from now until competition begins to re-position themselves for what hopefully is to come.

 

Image credit:  Flazingo Photos (flickr)

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